7-Eleven purchase of Speedway chain likely illegal as regulators disagree over deal

In dueling statements, Federal Trade Commission officials expressed concerns

WASHINGTON—The 7-Eleven convenience store chain said Friday it had completed a $21 billion acquisition of Marathon Petroleum Corp.’s Speedway convenience stores, amid disarray from U.S. antitrust enforcers who hadn’t agreed on what to do about a transaction they all said they believed was anticompetitive.

7-Eleven, a subsidiary of Tokyo-based Seven & I Holdings Co. reached the deal with Marathon last August, which adds roughly 3,800 Speedway stores in 36 states to its business. 7-Eleven said the transaction allowed it to expand its footprint and diversify its presence in 47 of the 50 most populated U.S. metro areas.

7-ELEVEN SEEKING 20,000 WORKERS ACROSS US LOCATIONS

The timing of the acquisition’s consummation was unusual because Democrats and Republicans at the Federal Trade Commission each said they had reasons to believe the transaction was unlawful, though the two camps, in dueling statements, signaled there wasn’t consensus, at least not yet, on how to address those concerns.

7-Eleven in a statement said it had negotiated a settlement with FTC staffers and thought it had a deal in place to address competitive concerns by divesting 293 stores, whose buyers were vetted and blessed by FTC investigators.

Such agreements still need formal approval by the commission.

"7-Eleven will continue to work with them to ensure that 7-Eleven meets its obligations under the negotiated settlement," the company said. "We are hopeful that the Commission will approve the negotiated settlement agreement in the near term."

Ticker Security Last Change Change %
SVNDY SEVEN & I HOLDINGS 22.5 -0.26 -1.14%
MPC MARATHON PETROLEUM CORP 59.58 -1.36 -2.24%

Acting Chairwoman Rebecca Kelly Slaughter and Commissioner Rohit Chopra, both Democrats, said they thought the transaction "is illegal" and raises "significant competitive concerns in hundreds of local retail gasoline and diesel fuel markets across the country."

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The FTC, they said, "has spent significant resources investigating this transaction but hasn’t yet come to an agreement with the parties and a majority of the commission that would fully resolve the competitive concerns. Seven and Marathon’s decision to close under these circumstances is highly unusual, and we are extremely troubled by it."

The commission’s two Republicans, Commissioners Noah Phillips and Christine Wilson, likewise said they believed the companies had hundreds of overlapping gasoline and convenience stores and combining them in certain markets would "violate the antitrust laws."

"There is no good reason for the commission to be in this mess," they said in a joint statement, referring to the FTC’s inability to finalize a decision. The Republicans said they "have been given no information suggesting the parties failed to work constructively with staff to negotiate a timely and effective resolution."

Neither statement made clear what exactly had prevented the FTC from making a decision on how to proceed.

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The FTC is a five-member body, with one seat currently vacant. President Biden has nominated Lina Khan, a big-tech critic who favors aggressive antitrust enforcement, to fill it.  The commission needs majority support for any course of action.

Companies normally wait for resolution with U.S. antitrust authorities before completing their transactions, but the government doesn’t have unlimited time to make up its mind.

Even though the transaction has closed, the companies and the FTC still potentially could reach a settlement. The commission also still has the option to challenge the acquisition if it chooses, though the government generally challenges mergers before they are finalized.